The Republic of Nessus was a large, polyethnic state whose independent existence dated from the 11th century. Nessus was a founding member of the United Nations, and was a party to the Statute of the International Court of Justice. Nessus failed to pay its United Nations membership dues in 1999. At the end of that year, it submitted to the U.N. a multi-year payment plan, under which it committed to repaying its 1999 dues by 2006.
In 2000, after several decades of non-violent but increasingly acrimonious disagreement between political factions in the north and south, Nessus was dissolved and its territory divided into two new states, the Republic of Acastus (Applicant in this case), encompassing the coastal plains of the north, and the State of Rubria (Respondent in this case), in the mountainous southern region.
The border between Acastus and Rubria runs through the Elysium, a territory occupied since prehistory by the Elysians. The Elysians are a community of approximately 5,000 indigenous inhabitants, with a unique and ancient cultural heritage.Acastus has granted the Elysians all rights of citizenship, even reserving for the community one seat in Parliament, which has been occupied since 2002 by Mrs. Doris Galatea. Under Rubrian law, in order to vote in parliamentary elections, a person must prove that he or she is a permanent resident of Rubria. To date, no Elysians have been able to meet this requirement.
In April 2001, Rubria applied for membership in the United Nations and was admitted as a member in October 2001.
At the time Rubria applied for U.N. membership, the Foreign Minister of Acastus sent a note to the United Nations Secretary-General, which included these words: I have the honour to inform you that the Republic of Acastus will continue the membership of the Republic of Nessus in the United Nations and all of the organs and organizations of the United Nations system, including the International Court of Justice. Similarly, Acastus will continue the party status of Nessus to all treaties for which the United Nations serves as depository.
In this connection, please substitute the name and flag of Acastus in place of those of Nessus. Please also accept this letter as constituting credentials for all those previously accredited as representatives of Nessus to represent Acastus in the United Nations and its organs.
On December 1, 2001, in response to Acastus's diplomatic note, the U.N. Security Council unanimously adopted Resolution 2386, stating in relevant part:Considering that the state formerly known as Nessus has ceased to exist;
Considering that it is unclear whether Acastus and/or Rubria should properly be deemed the successor state of Nessus as a matter of international law;
Considering that the State of Rubria has already applied for membership in the United Nations, its application has been granted, and representatives of Rubria, properly credentialed by its government, have taken their place in the councils of the various U.N. bodies and organs;
Decides that Acastus too should apply for membership in the United Nations.
At the request of the Secretary-General, the Under-Secretary-General for Legal Affairs on December 15, 2001, issued a memorandum interpreting Resolution 2386, which included this conclusion:
While the Security Council has noted that Nessus has ceased to exist, and has decided that Acastus should apply for membership in its own right, the Resolution does not prevent Acastus from temporarily continuing the membership of Nessus in the United Nations until Acastus has been admitted as a new member state.
Despite protests of Rubria and some other states, Acastus has never submitted an application for new membership in the United Nations.
Since independence, Acastus has aggressively urged its private corporations to seek out foreign investment opportunities. On December 10, 2002, the Parliament of Acastus passed the "Multinational Corporate Responsibility Act" (MCRA). On February 1, 2003, Rubria and Acastus signed the Rubria-Acastus Binding Bilateral Investment Treaty (RABBIT). The RABBIT established a most-favored-nation relationship between the two States with respect to investment, and established procedures for dispute resolution. The RABBIT also contained the section providing for jurisdiction of ICJ with regard to dispute resolution.
The Trans-National Corporation (TNC) is a privately-owned limited-liability company incorporated and headquartered in Acastus. In 2002, TNC geologists discovered a very rich deposit of oil in the mountains in the Rubrian portion of the Elysium. In May 2003, TNC and the government of Rubria announced the formation of Corporation for Oil & Gas (COG), a joint-venture corporation incorporated and headquartered in Rubria, for the purpose of developing and exporting the petroleum resources under the southern portion of the Elysium. 51% of the shares of COG are owned by TNC, and 49% are owned by the Rubrian Ministry of Natural Resources.
In April 2004, the experts submitted their recommendations, which included the construction of an oil and gas pipeline from the Elysium to the Kingdom of Creon, a neighboring state. The experts' plan would, however, require the destruction of over half of the Elysians' agricultural lands.
Conscious that the harm to local agriculture might provoke hostility from the Elysians, COG also authorized and financed the creation of a private security concern, Protection & Retention Operations Force (PROF), to accompany and guard their personnel. PROF consists largely of former members of the Rubrian armed forces.
When the pipeline proposal was announced publicly, it was immediately criticized in the international media. Mrs. Doris Galatea made a number of speeches on the floor of the Acastian Parliament. Mrs. Galatea also disclosed that PROF had been seizing young men from among the Elysians and forcing them to work on the COG project. She read to Parliament a letter which the ILSA team had received from Mr. Davide Borius, a young Elysian.
On September 30, 2004, financed by money raised by Mrs. Galatea and a number of local minority rights NGOs, Mr. Borius and an unincorporated group calling itself "Elysians for Justice" brought an action for damages in an Acastian civil court against COG, Rubria, PROF, and TNC. The action alleged that throughout September and October, PROF had on at least ten occasions seized Mr. Borius, along with scores of other Elysians, and forced them to perform dangerous work without compensation, in contravention of international law and the MCRA. TNC and PROF were later dismissed by court as party defendant. On January 15, 2005, the court issued a judgment against the two remaining defendants, who were found jointly and severally liable to the plaintiffs for compensatory damages in an amount equivalent to 200 million Euros.
President Fides immediately dispatched a diplomatic note to Prime Minister Lethe, the relevant part of which read:It goes without saying that my Government will not recognize the illegal, extraterritorial judgment of the courts of Acastus. If, in fact, the conclusion of your court is correct, and COG has acted in violation of the human rights of Elysian migrants, then TNC bears responsibility under your MCRA for the unlawful activities of its subsidiary. In light of this, under the RABBIT, Acastus is obligated to enforce the law against its own corporate citizen. Should it fail to do so, Acastus is liable to us for reparations.
On March 1, 2005, the Attorney General of Acastus notified the Ministry of Justice of Rubria that Acastus intended to institute proceedings before the International Court of Justice. On April 10, 2005, Rubria filed a preliminary objection to the admissibility of the application, which stated, in relevant part:
Rubria has no objection to the admissibility of the matters concerning the RABBIT. With respect to all other matters, however, including Rubria's alleged direct responsibility for alleged human rights violations, admissibility is contested. We advise the Court that Acastus is neither a member of the United Nations nor a party to the Statute of the Court. In this respect, we call the Court's attention to Security Council Resolution 2386.
The Court has ordered that, given the nature of the dispute, it will hear arguments relating to jurisdiction and the merits of the case at the same time.
Acastus requests that the Court adjudge and declare that:
(a) the Court has jurisdiction over all claims in this case, since Acastus has succeeded to Nessus's status as a party to the Statute of the Court;
(b) by permitting the construction of the pipeline as proposed, Rubria would violate the rights of Acastus's citizens of Elysian heritage;
(c) the activities of PROF in the Elysium, including the forced labor of civilians, are attributable to Rubria and are violations of international law; and
(d) the outcome of the Borius litigation does not place Acastus in breach of Article 52 of the RABBIT.
Rubria requests that the Court adjudge and declare that:
(a) the Court lacks jurisdiction over all claims other than those under the RABBIT, since Acastus is not the continuation of Nessus and has not accepted the compulsory jurisdiction of the Court in its own right;
(b) by permitting the construction of the pipeline as proposed, Rubria would exercise rights attendant to its sovereignty over territory and natural resources, and would not violate international law;
(c) the actions of PROF are not imputable to Rubria under international law, or in the alternative, did not violate any international legal obligation owed by Rubria to Acastus; and
(d) Acastus is in breach of Article 52 of the RABBIT by virtue of the Acastian civil court's decision.